Taiwan Welcomes Finance Industry Interest, Clears First Bank Investment In China

by Mary Swire, for LawAndTax-News.com, Hong Kong

03 April 2008

Taiwan's Financial Supervisory Commission this week welcomed recent interest by the international finance community in locating operations in the jurisdiction, putting this down to "a series of financial reform measures to encourage high quality foreign financial institutions to play a part in our domestic financial markets" implemented by the government.

The Commission explained that:

"Since 2007, Citibank, HSBC, Standard Chartered, ABN AMRO and DBS have invested in Taiwan's financial markets through mergers and acquisitions. Recently a number of other famous international financial institutions have also expressed a willingness to set up branches in Taiwan."

"Direct investments from foreign financial institutions help to improve banks' management efficiency and service quality. In the meantime, such investments also demonstrate affirmation of Taiwan's financial reforms, and show that the Taiwan government has made progress in its efforts to build up Taiwan as a regional funding and asset management center."

It continued:

"Speeding up financial internationalization has long been a key emphasis of government policy. To implement the policy goal of domestic banks marching outward, and foreign banks coming in, in addition to the government's continued review and relaxation of restrictions on investments in Taiwan by foreign banks, the FSC recently held several investment road shows in London and other international financial centers to familiarize overseas audiences with our financial policies and market opportunities."

"The aim is to raise our profile in international financial markets. Foreign financial institutions, for their part, have shown by concrete actions that they are serious about establishing a meaningful presence in Taiwan. This proves that government policies have scored preliminary results, and reveals that foreign investors have confidence in the future of Taiwan's financial industry."

The Financial Supervisory Commission also announced this week that it has approved a move by Fubon Financial to purchase a stake in mainland Chinese bank, the Xiamen City Commercial Bank, following the announcement last month that the territory's banks would be permitted to invest in their counterparts on the Chinese mainland via subsidiaries in third countries.

The Chinese authorities, for their part, agreed that such investments can take place provided the Taiwanese bank making the purchase meets Chinese requirements with regard to assets under management, and other criteria.

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